DIODE strategic research network Factors underpinning failure of

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DIODE - strategic research network Factors underpinning failure of digital start-ups in developing countries

DIODE - strategic research network Factors underpinning failure of digital start-ups in developing countries Rauf Jabarov Director, Electron Government Education and Training Center, under the Ministry of Transport, Communication and High Technologies of Azerbaijan Republic Manchester, 12 Aprel 2017

Content 1. 2. 3. 4. Start-ups’ failure Researches about Start-up ecosystem Factors underpinning failure

Content 1. 2. 3. 4. Start-ups’ failure Researches about Start-up ecosystem Factors underpinning failure What might be perspective research topics DIODE - strategic research network

Research topics v The role of multi-stakeholders’ intervention in the sustainability of digital start-ups

Research topics v The role of multi-stakeholders’ intervention in the sustainability of digital start-ups v Factors underpinning failure of digital start-ups in developing countries DIODE - strategic research network

Motivation To understand digital entrepreneurship in developing countries and how to develop an economic

Motivation To understand digital entrepreneurship in developing countries and how to develop an economic growth of digital entrepreneurship? To determine why digital entrepreneurship in Global South does not associate the same process and practice like in Global North? DIODE - strategic research network

Why startups fail so often DIODE - strategic research network

Why startups fail so often DIODE - strategic research network

Why they fail so often DIODE - strategic research network

Why they fail so often DIODE - strategic research network

Azerbaijan startup ecosystem 500 startups 5 success 95% in Baku $400 k raised 90%

Azerbaijan startup ecosystem 500 startups 5 success 95% in Baku $400 k raised 90% web

Analytical framework Success or failure factors external factors vs internal factors

Analytical framework Success or failure factors external factors vs internal factors

Researched cases – startup stories • • • Golden. Pay – e-payment platform Manads

Researched cases – startup stories • • • Golden. Pay – e-payment platform Manads – mobile ads platform Net. Trends – social network data tracker We. Travel – US based traveling platform Keepface – influencer marketing platforms

Factor 1 – Ecosystem / institutional Startups in other places are just doing what

Factor 1 – Ecosystem / institutional Startups in other places are just doing what startups naturally do: fail. The real question is, what's saving startups in places like Silicon Valley? ʽʽ Place means much more BAD LOCATION POOR CONNECTION Connection is the half of success Legal problems hamper the success Do we need policy?

Factor 2 – Market, product, technology • Many startup products do not fit market

Factor 2 – Market, product, technology • Many startup products do not fit market or NO MARKET NEED. • They do not disrupt or their product is a poor copy of foreign products. • New tech trends like big data, clouds, mobile should be considered. • Wrong business models to achieve a market scale ʽʽ Whatever you sell, you have to sell it smartly

Factor 3 – financial / economic • Startups cannot use small investments to survive

Factor 3 – financial / economic • Startups cannot use small investments to survive • Startups have no a correct strategy to attract attention of limited number venture companies • Struggling with an access to overseas funding RUN OUT OF CASH ʽʽ The small “feeding” grant money does not lead to success but helps to solve some “fixed time problems”

Factor 4 – human and social • No proper experience of founders and developers

Factor 4 – human and social • No proper experience of founders and developers to succeed • HR capability in IT sector extremely needs to increase the number of developers • Poor self-confidence, lack of startup mind to work extremely hard to get reward. • Fear to take risk NOT THE RIGHT TEAM ʽʽ No one can help you, if you simply get it wrong with your team building

Startup trajectories matter more

Startup trajectories matter more

Startup trajectory and research perspective • Digital and analog • Local and Global •

Startup trajectory and research perspective • Digital and analog • Local and Global • business model and sector variables Trajectory role on success or failure: v how enterprises are able to pursue certain trajectories Research perspective: v Identify, conceptualize, theorize different kinds of trajectories v Understand reasons for variation of trajectories

Future research direction thoughts While all stakeholders are keen to understand how to achieve

Future research direction thoughts While all stakeholders are keen to understand how to achieve ‘an healthy startup environment’, why startups fail, what are the problems to apply the practice of Global North to the Global South… Why is it not interesting to research this process? Maybe I am wrong? !

DIODE - strategic research network Thanks for attention r. cabarov@mincom. gov. az www. linkedin.

DIODE - strategic research network Thanks for attention r. cabarov@mincom. gov. az www. linkedin. com/in/rauf-jabarov/